Govt lifts onion export ban, sets floor price

Govt lifts onion export ban, sets floor price

New Delhi: Govt has lifted a ban on exports of onion that had riled farmers, sources said, just two months after its introduction to stem soaring prices, as the country’s food inflation begins to show an easier trend.

The country had banned overseas sales of the vegetable in December as prices spiralled, to try to rein in food inflation. But farmers objected to the blanket stoppage, saying some onions were only grown for export and the ban was hurting incomes.

Last week, agriculture minister Anand Sharma allowed export of one premium variety.

The rise in the cost of food for Indian families slowed to a two-month low in early February on more moderate prices of onions and other vegetables, amid expectations the government may announce fresh measures to boost productivity for key staples in the upcoming budget.

Finance minister Pranab Mukherjee will present the federal budget on 28 Feb.

India’s food price index rose 11.05% in the year to 5 Feb., the lowest reading since the first week of December, government data on Thursday showed.

Indian food inflation is among the highest in Asia despite good harvests of major cereal crops.

The country’s grain production is expected to rise 6.4% to 232.07 million tonnes in 2010/11, aided by normal monsoon rains of last year.